Receivership Ordered for Ashcroft Urban Developments Following Creditor Opposition to CCAA Proceedings

On December 20, 2024, the Ontario Superior Court of Justice granted a motion to appoint an interim receiver for Ashcroft Urban Developments Inc. and certain affiliated entities (“Ashcroft”). The proceedings, initiated under the Companies’ Creditors Arrangement Act (“CCAA”), were met with strong opposition from secured creditors representing more than 80% of Ashcroft’s secured debt. The secured creditors instead supported a co-ordinated receivership as the most effective path forward.

Ashcroft had obtained an initial order under the CCAA on December 5, 2024, without notice to its major secured creditors. At the comeback hearing seven days later, the secured creditors, having only just learned of the CCAA proceedings, sought the appointment of an interim receiver and the dismissal of the CCAA proceedings. The court agreed, granting the relief sought by the secured creditors.

Ashcroft, a significant developer in Ottawa’s housing market, has faced ongoing liquidity challenges due to rising interest rates and declining occupancy levels. Attempts to restructure through forbearance agreements and asset sales proved insufficient, prompting creditors to pursue a receivership to safeguard their investments and expedite asset realization.

Aird & Berlis represented CMLS Financial Ltd. and Equitable Bank in this matter, with a team led by Robb English and including Sanjeev Mitra and Calvin Horsten (Financial Services).